In late 2018, Gerald Cotton, CEO of Quadriga CX (Canada’s largest crypto currency exchange), died, age 30, taking with him the company’s “digital wallets” and their password to his grave; wiping out an estimated almost $283 million worth of crypto currency forever. A complex string of passwords were required to gain access to the wallets, which were known only to Cotton and not left for anyone else to access (or at least not as far as they have yet found!), leaving the company, its creditors and investors unable to gain access to those funds. This is not the first time this sort of thing has happened.
The passwords were so secure that no one knows where they are!
Great security – Poor succession planning!
Whilst there are specific crypto currency solutions, this example simply highlights the importance for us non-crypto executives of making arrangements for our digital assets on death or incapacity.
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This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.